TaxTMI 
TaxTMI 
2018 (12) TMI 1783
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..../07/2018. The matter was carried before the Hon'ble High Court of Meghalya at Shillong by the appellant. The Hon'ble High Court disposed of the Central Excise Appeal No. 20/2018 by issue of Order dated 25/10/2018, in which the Order passed by the Tribunal was set aside and remitted the matter back for deciding the appeal fresh. 3. The appellant is engaged in the manufacture of Ferro Silicon products. The appellant's factory is situated in the State of Meghalya and was availing the benefit of Area Based Exemption under Notification No. 32/99-CE dt. 08/07/1999. As per the terms of the Notification, the appellant was entitled to claim refund of Central Excise Duty paid by them in excess of amount paid by utilizing the Cenvat Credit. 4. The dispute pertains to the period 2004-05 during which the Central Excise Officers, during Audit, noticed that the appellants sold their finished goods by paying duty by including the cost of transportation. Revenue was of the opinion that the place of removal was the factory gate and accordingly, there was no mandate to include the cost of transportation for paying duty. By taking the view that the goods were overvalued and excess refunds were c....
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....'ble Supreme Court in the above case. While referring to Section 19 of the Sale of Goods Act, 1930, the Hon'ble Supreme Court in that case had held that the cost of transportation is to be included in the price of the goods where the Sale of goods take place at the buyer's premises on delivery of goods. Finally, she submitted that the impugned order is not justified and may be set aside. 7. The Ld. DR for Revenue justified the impugned order. He specifically relied on the following case laws:- (i) In the case of Commissioner of Central Excise, Shilong vs. Guwahati Carbon Ltd. (243) E.L.T. 307 (Tri.-Kol.), he submitted that the case is similar to the present case. In that decision, Tribunal had decided that factory is to be considered as the place of removal. As such transport charges cannot be included in the assessable value. (ii) He also relied on the decision of the Hon'ble Supreme Court in the case of Commr. Of Cus. & C. EX., Nagpur Vs. Ispat Industries Ltd. reported in 2015 (324) E.L.T. 670 (S.C.). The Apex Court has taken the view that the buyer's premises cannot be considered as the place of removal for purpose of Section 4 of Central Excise Act, 1944. ....
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....es it clear that the cost of Transportation from the factory to the place of removal, where the factory is not the place of removal, shall not be excluded for the purpose of determining the value of excisable goods. To apply the above Rule, it is required to determine which is the place of removal whether it is the factory gate or the buyer's premises. To decide the issue, we are guided by the observation of the Hon'ble Supreme Court in the case of Roofit Industries (Supra). In the above case, the Hon'ble Supreme Court has considered an identical question in a case where the purchase order was to transfer the property of goods to the buyer at the premises of the buyer. Observations of the Apex Court are reproduced below:- "11. It will be seen that the value of an article chargeable with excise duty is deemed to be the wholesale cash price for which an article of the like kind and quality is sold or capable of being sold at the premises of manufacture or production. In A.K. Roy v. Voltas Ltd., (1973) 3 SCC 503 = 1977 (1) E.L.T. (J177) (S.C.), this Court had occasion to deal with the said provision and in para 22 thereof stated :- "... The section postulates that th....
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....ersons) or where such goods are not sold to such dealers, to dealers (being related persons), who sell such goods in retail; (b) Where the normal price of such goods is not ascertainable for the reason, that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed. (2) Where, in relation to any excisable goods the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery shall be excluded from such price. (3) The provisions of this section shall not apply in respect of any excisable goods for which a tariff value has been fixed under sub-section (2) of section 3. (4) For the purposes of this section, - (a) "assessee" means the person who is liable to pay the duty of excise under this Act and includes his agent; (b) "place of removal" means - (i) a factory or any other place or premises of production or manufacture of the excisable goods....
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....nder the aforesaid heads cannot, on the same grounds, be deducted. But the assessee will be entitled to a deduction on account of the cost of transportation of the excisable article from the factory gate to the place or places where it is sold. The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place or places of delivery." [at para 50] 14. This view of the law was reiterated in Government of India v. Madras Rubber Factory Ltd., (1995) 4 SCC 349 = 1995 (77) E.L.T. 433 (S.C.). Interestingly, in paragraph 39 of the judgment, cost of transportation from the factory gate to the place of removal not forming part of excise duty was conceded by the revenue." 12. After carefully considering the terms of the purchase orders, it is noted that in terms of such purchase orders, the transfer of property in the goods, is taking place at the premises of the buyers and as such by virtue of Section 19 of the Sale of Goods Act, 1930, the sale takes place at that time. Accordingly, the place of removal is considered as the buyer's premises under the given circumstances. Consequently, as per Explanation ....